If you have finally found your dream home, but you haven't pre-qualified for a loan yet, you can estimate your chances by plugging in certain information, such as the cost of the home, the likely interest rate on your loan, the amount of the down payment. The calculator computes the monthly income required of you to qualify for the mortgage on the home you love.

For example, if the property you've found costs $300,000.00 and you plan to put $30,000.00 down on a 30 year loan with a 5.000% interest rate, your monthly payment on the principal and interest will be $1,449.42. If your annual property taxes are $3,000.00 and your annual insurance is $1,500.00, that will bring your total monthly payment to $1,936.92. With such a monthly payment, your total gross monthly income will need to be at least $6,456.39 in order to qualify for the loan.

The estimated front and back ratios help you limit your housing and other necessary living expenses. The front ratio is the percentage of your gross income that you can spend on all housing related expenses, including property taxes and insurance. The back ratio is the percentage of your gross income that you can spend on your housing expenses plus the cost of shelter: food, clothes, gas, etc.

Nowadays, the front / back ratios with values of 28-33 / 36-42 are considered to be conservative; values bigger than 35 / 45 are called aggressive and not recommended for use.